(BIV) Vancouver pushes its global VR hub potential

San Francisco and Seattle are known for tech and gaming, and Los Angeles has the market cornered on film and TV.

But a little farther north you’ll find the one West Coast city possessing deep enough expertise in gaming, tech and entertainment to emerge as a global virtual reality hub, says David Gratton.

After the CEO of Vancouver-based Work at Play tried on the Microsoft (Nasdaq:MSFT) Holo Lens headgear in 2015 he decided it was time to pivot his digital agency and become a centre for excellence in virtual reality (VR) and mixed reality (MR).

Gratton is in the midst of locking down a site near downtown Vancouver that could house as many as 50 VR/MR experts who would collaborate in a collective workspace.

One of the requirements is that workspace occupants, who will share access to VR/MR hardware and boardrooms, must meet once a week to share best practices.

“This is not a collective for somebody who’s just looking for space to lock themselves into their office and never come out. It will be a requirement to participate,” Gratton said.

He plans to launch the space by April and is counting on competing firms to actively collaborate on problem solving in an industry still in its early stages.

“Content is a big component of what this new type of computing requires,” he said. “And it requires 3D content, and we have a robust games industry here and we have a games legacy that is very, very, very, very strong and that has the technical ability to deliver 3D assets.

“Further to that, you have this technology that is a new way of certainly storytelling and immersing an audience. And we have a film and television industry here as well in Vancouver.”

Edoardo De Martin, director of Microsoft Vancouver, told Business in Vancouver that his office would be supporting the collective workspace upon its launch.

“The talent that you’ll find in 3D development across video games, special effects and animation in British Columbia is ideal for the growing VR/MR industry,” he said in an email.

“There’s an opportunity for Vancouver to establish itself as a global leader in this sector, and spaces like the one proposed by David Gratton will help us move faster.”

Wren Handman, who writes about VR at the Axiom Zen innovation studio, said Vancouver is the only city she’s aware of that is launching a VR co-operative working space.

“We have this very interesting geographic position, kind of in the centre of the triangle, almost, that gives us a leg up over other Canadian cities like Montreal and Toronto,” Handman said.

And beyond West Coast U.S. cities like Seattle, San Francisco and L.A., the last side of that triangle Handman refers to is China.

“In China there’s a big market for VR, but there’s a lot of the copycat hardware type of platforms and not very good content. But the appetite there is huge,” said Dan Burgar, director of business development and partnerships at Vancouver-based virtual reality firm Archiact Interactive.

Over the past two years Archiact has opened offices in China and secured a $4.12 million investment from Shanghai’s 37Games. The Chinese company in turn took a 10% stake in Archiact.

Last fall, Beijing-based Match-Light Interactive Entertainment Technology Corp. opened its first North American office in Burnaby, where it launched a North American subsidiary known as Fire-Point Interactive.

Fan Zhang, the local office’s games publishing manager, told BIV in November the company launched Fire-Point Interactive to capitalize on the level of talent already emerging from the local VR sector.

Handman said it’s unclear why the content being developed in China isn’t as strong as what’s emerging from North America. But developers on this side of the Pacific are benefiting from China’s advancements in hardware.

“They can do things with hardware that we can’t [in North America] because our patent laws are very different,” Handman said.

“It’s copying designs and then being able to rapidly innovate in a way that we can’t here because we have so many different patent laws, and different people own so many different parts that innovating on someone else’s design here is illegal.”

Bill Tam, CEO of the BC Tech Association, says the region is being helped considerably by having a head start over other potential global hubs.

“It probably goes back to early days when Vancouver was at the cutting edge of a lot of 3D work, whether it was 3D animation or 3D special effects – you can go back easily 10 years,” he said.

Much like Work at Play, Archiact has pivoted its own business with the launch of more consumer-oriented VR hardware over the last year and a half.

Starting as a gaming company in 2013, Archiact’s move into VR and augmented reality highlights the industry’s search for solutions to real-world problems, Burgar said.

“To build demos or experiences for VR, it’s just not really going to move the technology along and it’s not really going to do much to build [Vancouver] as a VR hub,” he said.

The region’s proficiency at developing VR content pushed Burgar last month to launch a local chapter of the VR/AR Association, a global industry group with offices in London, Los Angeles and San Francisco.

Archiact’s own growth has been swift the past year – its workforce has expanded from 35 to 80 people since February 2016 – and it’s one of the few VR firms bringing in revenue, Burgar said.

Finger Food Studios, meanwhile, brought in an estimated $20 million in revenue in 2016, according to CEO Ryan Peterson.

“Out of all the chapters, Vancouver’s leading the way,” Burgar said. “It surprised the head office at the VR/AR Association because they’re like, ‘Vancouver – where is this?’ We’re really building it out to be the potential next Silicon Valley for VR and mixed reality.”

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